# STATE OF U P AND ORS v. ALL U P CONSUMER PROTECTION BAR ASSOCIATION

- **Citation:** [2016] 8 S.C.R. 851
- **Court:** Supreme Court of India
- **Decided:** 2016
- **Case number:** Civil Appeal No. 2740 of2007
- **Bench:** T.S. Thakur, Dr. D.Y. Chandrachud, L. Nageswara Rao
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-u-p-and-ors-v-all-u-p-consumer-protection-bar-association-31448
- **Pages:** 22

## Headnote

Consumer Protection Act, 1986 - Effective implementation of
A
B
the Act - Deficiency of infrastructure in the adjudicatory fora -
C
Constitution of Justice Arijit Pasayat Committee to look into
deficiencies - Interim report by the Committee to the effect that the
cons11111er fora did not function effectively due to a poor
organizational set up, grossly inadequate infrastructure, absence
of adequate and trained manpower and lack of qualified members
in the adjudicating bodies - Suggestions given to the Central D
Government and State Government - Failure of State Governments
to respond to the suggestions - Held: Systemic overhaul of the entire
infrastructure is necessary if the Act is not to beco111e a dead letter
- Findings of the Com111ittee in the interim report are entitled to
deference - Though powers relating to the appointments and E
ad111inistration of the State fora lie with the State Govern111ent, vesting
of the rule making power in the State Governments may result in a
lack of uniformity of rules across the country, both in regard to the
ter111s and conditions of service and appointment - It would result
in wide variation in standards and great deal of subjectivity, and
bureaucratic and political interference - In view thereof. directions
F
issued to the Centre Govern111ent to fra111e model Rules relating to
administration, selection and appointment of me111bers, infrastructure
etc., at al/ levels of consumer fora - ss. 24B,6(1)(b),JO(l)(b), 30.
This Court issued several directions as regards the deficiency of
infrastructure in the adjudicatory fora under the Consumer Protection
G
Act, 1986. A Committee presided by Justice Arijit Pasayat was
constituted to look into deficiencies in the working of the fora. The
Committee assessed the prevailing conditions in different States.
Thereafter, the Committee submitted an Interim Report to the effect
that the consumer fora did not function as effectively as expected due to
H
851
852
SUPREME COURT REPORTS
[2016] 8 S.C.R.
A
a poor organizational set up, grossly inadequate infrastructure, absence
of adequate and trained manpower and lack of qualified members in the
adjudicating bodies. The suggestions were given to the Central
Government and the State Governments. The State Governments failed
to respond to the suggestions for streamlining the state of affairs.
B
c
D
E
Adjourning the matters for further directions and for
reporting compliance, the Court
HELD: 1.1 The interim report of the Committee provides
an unfortunate reflection of the state of affairs in the consumer
fora at the district, state and national level. That these bodies
which are vested with important functions of a judicial nature
continue to work despite the prevalence of such adverse
conditions and in the face of the apathy of the governments both
at the national and state level is a matter which requires immediate
intervention by this Court. A systemic overhaul of the entire
infrastructure is necessary if the Consumer Protection Act, 1986
is not to become a dead letter. With the proliferation of goods
and services in a rapidly growing economy, Parliament envisaged
the enactment to be the corner-stone of a vibrant consumer
movement. Reality has been distant from the aspirations of the
law. The state of affairs revealed before the Court warrants
systemic changes. [Para 9](861-G-H; 862-A]
1.2 One of the principal problems governing the functioning
of the district fora and the State Commissions is the absence of
clarity in regard to the exercise of administrative and disciplinary
control. Section 24 vests administrative control over the State
F
Commissions in the President of the National Commission and
over the district fora in the Presidents of the State Commissions.
The extent of the administrative control shall be in all matters
,.-fating to the administrative functioning of the forum concerned
including but not limited to assignment of judicial and
G
H
administrative work; posting, transfer and control over

## Text

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[2016] 8 S.C.R. 851
STATE OF U P AND ORS
v.
ALL U P CONSUMER PROTECTION BAR ASSOCIATION
(Civil Appeal No. 2740 of2007)
NOVEMBER21, 2016
[T.S. THAKUR, CJI, DR. D.Y. CHANDRACHUD AND
L. NAGESWARA RAO, JJ.]
Consumer Protection Act, 1986 - Effective implementation of
A
B
the Act - Deficiency of infrastructure in the adjudicatory fora -
C
Constitution of Justice Arijit Pasayat Committee to look into
deficiencies - Interim report by the Committee to the effect that the
cons11111er fora did not function effectively due to a poor
organizational set up, grossly inadequate infrastructure, absence
of adequate and trained manpower and lack of qualified members
in the adjudicating bodies - Suggestions given to the Central D
Government and State Government - Failure of State Governments
to respond to the suggestions - Held: Systemic overhaul of the entire
infrastructure is necessary if the Act is not to beco111e a dead letter
- Findings of the Com111ittee in the interim report are entitled to
deference - Though powers relating to the appointments and E
ad111inistration of the State fora lie with the State Govern111ent, vesting
of the rule making power in the State Governments may result in a
lack of uniformity of rules across the country, both in regard to the
ter111s and conditions of service and appointment - It would result
in wide variation in standards and great deal of subjectivity, and
bureaucratic and political interference - In view thereof. directions
F
issued to the Centre Govern111ent to fra111e model Rules relating to
administration, selection and appointment of me111bers, infrastructure
etc., at al/ levels of consumer fora - ss. 24B,6(1)(b),JO(l)(b), 30.
This Court issued several directions as regards the deficiency of
infrastructure in the adjudicatory fora under the Consumer Protection
G
Act, 1986. A Committee presided by Justice Arijit Pasayat was
constituted to look into deficiencies in the working of the fora. The
Committee assessed the prevailing conditions in different States.
Thereafter, the Committee submitted an Interim Report to the effect
that the consumer fora did not function as effectively as expected due to
H
851
852
SUPREME COURT REPORTS
[2016] 8 S.C.R.
A
a poor organizational set up, grossly inadequate infrastructure, absence
of adequate and trained manpower and lack of qualified members in the
adjudicating bodies. The suggestions were given to the Central
Government and the State Governments. The State Governments failed
to respond to the suggestions for streamlining the state of affairs.
B
c
D
E
Adjourning the matters for further directions and for
reporting compliance, the Court
HELD: 1.1 The interim report of the Committee provides
an unfortunate reflection of the state of affairs in the consumer
fora at the district, state and national level. That these bodies
which are vested with important functions of a judicial nature
continue to work despite the prevalence of such adverse
conditions and in the face of the apathy of the governments both
at the national and state level is a matter which requires immediate
intervention by this Court. A systemic overhaul of the entire
infrastructure is necessary if the Consumer Protection Act, 1986
is not to become a dead letter. With the proliferation of goods
and services in a rapidly growing economy, Parliament envisaged
the enactment to be the corner-stone of a vibrant consumer
movement. Reality has been distant from the aspirations of the
law. The state of affairs revealed before the Court warrants
systemic changes. [Para 9](861-G-H; 862-A]
1.2 One of the principal problems governing the functioning
of the district fora and the State Commissions is the absence of
clarity in regard to the exercise of administrative and disciplinary
control. Section 24 vests administrative control over the State
F
Commissions in the President of the National Commission and
over the district fora in the Presidents of the State Commissions.
The extent of the administrative control shall be in all matters
,.-fating to the administrative functioning of the forum concerned
including but not limited to assignment of judicial and
G
H
administrative work; posting, transfer and control over members;
selection, appointment and disciplinary matters relating to the
staff of the district fora and State Commissions and in relation
provisioning and meeting the infrastructural requirements of
those bodies. The requirements of infrastructure would be met
in co-ordi'natign with the Departments of Consumer Affairs of
the States concerned and, in relation to the National Commission
STATE OF U.P. AND ORS. v. ALL U P CONSUMER
853
PROTECTION BAR ASSOCIATION
in coordination with the Union Ministry of Consumer Affairs, Food A
and Public Distribution. [Para 12)[862-C-D; 867-A-C]
1.3 The rule making powers under the 1986 Act are
embodied in Section 30. The Central government is vested with
rule making power in relation to Section 20(l)(b)-relating to
appointments of members of the National Commission under B
Section 30. The rule making power with reference to the
provisions of Section lO(l)(b) and Section 16(1)(b) is vested in
the State government under Section 30. The difficulty arises
because the vesting of the rule making power in the state
governments in this manner may result in a lack ofuniformity of C
rules across the country, both in regard to the terms and
conditions of service as well as in regard to the modalities to be
followed in ensuring that persons appointed as members fulfill
the qualifications which are prescribed. These are broad general
categories. There can be no gainsaying the importance of adopting
unified standards and objective processes of selection from a
D
national perspective. This would ensure an objective formulation
of norms and their uniform application in different States in the
country. In the absence of a uniform pattern, the result is a wide
variation in standards and a great deal of subjectivity, and
bureaucratic and political interference, noticed in the reports
submitted by the Committee. The findings of the Committee in
the interim report are entitled to deference. [Para 11)(866-D-H)
1.4 Under Section 30(A)(l) the National Commission is
empowered, with the previous approval of the Central
Government, to frame regulations not inconsistent with the Act
E
F
to provide for all matters for which provision is necessary or
expedient for the purpose of giving effect to the provisions. It is
necessary for the National Commission to frame regulations
expeditiously to give effect to its administrative control u/s. 24B.
The Regulations shall ensure the effective exercise of
administrative control by the National Commission over the State
G
Commissions and by the latter over the district fora. [Para 14)867F-G)
1.5 In the Consumer Protection Bill, 2015, the proposed
expansion of pecuniary limits of the district fora to Rupees one ·
H
854
SUPREME COURT REPORTS
[2016] 8 S.C.R.
A
crore, requires the strengthening of the quality of adjudication in
the district fora. Members of the forum must be aware of the
responsibility vested in them as adjudicating officers. There is a
need to ensure checks and balances. The work which is performed
by the consumer fora constituted in the three tier hierarchy
B
c
D
E
F
provided under law is of a judicial nature. The district forum is
vested with powers of a Civil Court under the Code of Civil
Procedure, 1908 while trying a suit in respect of various matters
set out in Section 13(4). These provisions apply to the State
Commission u/s. 18 and to the National Commission u/s.22. Both
having regard to the significant adjudicatory powers that are
conferred upon the fora constituted under the Act and particularly
in the context of the observations contained in the interim report
of the Committee, the said directions are necessary to inculcate
a sense of discipline and accountability amongst the members of
the fora constituted under the Act. [Para 15][868-C-F]
1.6 The reliefs mentioned by the Committee regarding
seeking direction to the State of Tamil Nadn and the State of
Jammu and Kashmir respectively to appoint the President and
Members of the State Commission at the earliest, is allowed. As
regards prayer seeking direction to State of Uttar Pradesh to
take appropriate disciplinary action against 'JA' non-judicial
member of District Forum for his unauthorized absence for over
a year, forthwith, the President of the State Commission in Uttar
Pradesh is directed upon the issuance of show cause notice to
'JA' and after furnishing him an opportunity of submitting his
explanation submit a report to the State Government. The State
Government would thereupon pass necessary orders in
accordance with law within the stipulated time. [Para 16][868-Glf: 869-A, C-DJ
1.7 This Court permitted the Committee to forward its
recommendations to each State Government concerned for
G appropriate steps in a time bound manner. A copy of the
recommendations was directed to be submitted to this Court to
enable it to issue directions should the recommendations not be
implemented by the State Governments. Since the
recommendations have been made after a detailed inspection and
H in the interests of facilitating a proper implementation of the
STATE OF U.P. AND ORS. v. ALL UP CONSUMER
855
PROTECTION BAR ASSOCIATION
provisions of the Act, the State Governments is directed to A
implement the recommendations of the Committee within a period
of three months. [Para l 7](869-F-G]
1.8 In view of the above, the following directions are issued:
(i) The Union Government would for the purpose of ensuring
uniformity in the exercise of the rule making power under Section
B
10(3) and Section 16(2) frame model rules for adoption by the
State Governments, within four months and would submit to this
Court for its approval; (ii) The Union Government would also
frame within four months model rules prescribing objective norms
for implementing the provisions of Section lO(l)(b), Section C
16(1)(b) and Section 20(l)(b) in regard to the appointment of
members respectively of the District fora, State Commissions
and National Commission; (iii) The Union Government would
while framing the model rules have due regard to the formulation
of objective norms for the assessment of the ability, knowledge
E
and experience required to be possessed by the members of the D
respective fora in the domain areas referred to in the statutory
provisions. The model rules would provide for the payment of
salary, allowances and for the conditions of service of the
members of the consumer fora commensurate with the nature of
adjudicatory duties and the need to attract suitable talent to the
adjudicating bodies. These rules would be finalized upon due
consultation with the President of the National Consumer
Disputes Redressal Commission, within the period stipulated;
Upon the approval of the model Rules by this Court, the State
Governments would proceed to adopt the model rules by framing
appropriate rules in the exercise of the rule making powers under
F
Section 30 of the Act. The National Consumer Disputes Redressal
Commission is requested to formulate regulations under Section
30A with the previous approval of the Central Government within
the stipulated period in order to effectuate the power of
administrative control vested in the National Commission over
G
the State Commissions under Section 24(B)(l)(iii) and in respect
of the administrative control of the State Commissions over the
District fora in terms of Section 24(B)(2) to effectively implement
the objects and purposes of the Act. [Para 18] [869-H; 870-AH]
H
856
SUPREME COURT REPORTS
[2016] 8 S.C.R.
A
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2740
B
of2007.
From the Judgment and Order dated 08.10.1998 of the High Court
of Judicature at Allahabad in CMWP 968 of 1997.
WITH
W. P. (C) No. 164 of2002.
Maninder Singh, ASG, Ajit Kumar Sinha, Atul Chitley, Sr. Advs.,
V. K. Shukla, S. K. Pabbi, AA Gs, Suryanarayana Singh, Sr. AAG, Gaurav
Dhingra, R. Balasubramanian, Shekhar Vyas, Santosh Kumar, Ms. Aarti
c Sharma, Prabhas Bajaj, R. K. Rathor, R. S. Nagar, Ms. Rukhmini Bobde,
S. Wasim A. Qadri, S. S. Rawat, D. S. Mahra, M. K. Maroria,
K. V. Jagdishvaran, Ms. G. Indira, Shuvodeep Roy, Gopal Singh,
Ms. Varsha Poddar, Atul Jha, Sandeep Jha, Rajesh Srivastava,
Ms. Pragati Neekhra, Krishnanand Pandey, Ms. Hemantika Wahi,
Ms. Aagam Kaur, Ms. Mamta Singh, V. N. Raghupathy,
D Parikshit P. Angadi, Nishe Rajen Shonker, Ms. Anu K. Joy, Gajendra
Khichi, Amo! Nirmal Kumar Suryawanshi, Nishant R. Kathneshwarkar,
Ranjan Mukherjee, K. V. Kharlyngdoh, K. N. Madhusoodhanan,
R. Sathish, Ms. K. Enatoli Serna, Edward Belho, Amit Kumar Singh,
K. Luikang Michael, Ms. Disha Singh, Shivendu Gaur, V. G. Pragasam,
E
S. Prabu Ramasubramanian, Ms. Aruna Mathur, Yusuf Khan, Avneesh
Arputham, Ms.AnuradhaArputham, Gopal Singh, Rituraj Biswas, Vikrant
Yadav, Mukul Singh, Ashutosh Kumar Sharma, Ms. Rachna Srivastava,
Ms. Monika, Sukrit R. Kapoor, Ajay Pal, Arun K. Sinha, Avijit
Bhattacharjee, Balaji Srinivasan, Gunnam Venkateswara Rao, Kuldip
Singh, Naresh K. Sharma, Pradeep Misra, Rajesh Srivastava, Ravindra
F Kumar, R. Gopalakrishnan, S. Srinivasan, T. Harish Kumar, Tushar
Bakshi, Ms. C. K. Sucharita, Mis. Corporate Law Group, T. V. Ratnam,
Ashok K. Srivastava, C. D. Singh, Krishnanand Pandeya,
K. R. Sasiprabhu, Milind Kumar, Pramod Dayal, Radha Shyam Jena,
Rajeev Sharma, Sibo Sankar Mishra, Ms. Revathy Raghavan, Tara
G Chandra Sharma, Ms. A. Subhashini, Ms. Kaveeta Wadia, Ms. Sumita
Hazarika, Advs. for the appearing parties.
The Judgment of the Court was delivered by
DR. D. Y. CHANDRACHUD, J. I. The deficiency of
infrastructure in the adjudicatory fora constituted under the Consumer
H Protection Act, 1986 has led to several directions of this Court in the
STATE OF U.P. v. ALL U P CONSUMER PROTECTION BAR
857
ASSOCIATION [DR. D. Y. CHANDRACHUD, J.]
course of the proceedings in this case. On 14 January 2016, this Court A
constituted a Committee presided over by Mr Justice Arijit Pasayat, a
former judge of this Court, to examine:
(i) the infrastructural requirements of the State Commissions,
deficiencies in infrastructure and remedial measures;
(ii) the position of vacancies of members at the national, state and
B
district level;
(iii) the need for additional Benches at the national, state and district
level;
(iv)conditions of eligibility for appointment of non-judicial members;
C
(v) administrative powers which have been or should be conferred
on the presiding officers of the state and district fora;
(vi) service conditions including pay scales governing the presiding
officers and members;
(vii)requirements of staff;
(viii) creation of a separate cadre of staff at the national, state
and district level; and
(ix) other relevant issues.
The Committee was requested, while examining these issues, to
submit its recommendations. The Committee has since the
commencement of its work in February 2016 inquired extensively into
the matters referred to it and has made an assessment of the prevailing
conditions in the States ofOrissa, Maharashtra, Punjab, Haryana, Andhra
Pradesh, Telangana, Jammu and Kashmir, Tamil Nadu, Bihar and
Jharkhand. The Committee has also analysed the prevailing position at
the National Consumer Disputes Redressal Commission, as well as the
State Commission in New Delhi.
2. The facts which have emerged from the interim report submitted
D
E
F
by the Committee on 17 October 2016 constitute a sobering reflection of G
how far removed reality lies from the goals and objectives which
Parliament had in view while enacting the Consumer Protection Act,
1986. The Committee has observed that the fora constituted under the
enactment do not function as effectively as expected due to a poor
organizational set up, grossly inadequate infrastructure, absence of
H
858
A
B
c
D
E
F
SUPREME COURT REPORTS
[2016] 8 S.C.R.
adequate and trained manpower and lack of qualified members in the
adjudicating bodies. Benches of the state and district fora sit, in many
cases for barely two or three hours every day and remain non-functional
for months due to a lack of coram. Orders are not enforced like other
orders passed by the civil courts. The state governments have failed to
respond to the suggestions of the Committee for streamlining the state
of affairs.
3. The pathetic state of infrastructure is made evident in the
following findings in the report of the Committee:
"The Committee, during its visits to states, has found that there
are no proper court-rooms with lights and fans, chairs and tables. The
condition of Chambers of the Presiding Members is pathetic. They do
not have adequate or trained staff. They do not have stenographers for
taking dictations. At some Consumer Fora, there are no peons to retrieve
the files from the Record Room. The Record-Rooms are, also, either
too small and have no almirah, shelves or compactors to keep the files.
The files are kept in open and get misplaced or eaten by termites. The
Central Government provides funds for construction of the new buildings,
carrying out additions/alterations/renovations of existing buildings and
grant for acquiring non-building assets such as furnitures, office
equipments etc. The State Governments have to provide the land for
construction of new buildings for the Consumer Fora. The Committee
has noted that the State Governments have not been quick enough to
allot land for construction of Consumer Fora in their respective States.
It has, also, come to the notice of the Committee that the State
Governments - responsible for timely filling up of the vacancies of the
Presidents and Members in the State Commissions and District Fora of
the states, have failed to keep the time limit. The Committee has come
across instances where the State Governments have taken upto 7/10
months to approve the recommendations of the Selection Committee".
The quality of presiding members, especially of non-judicial
members at the state and district levels is poor. One of the reasons is
G that the remuneration which is being paid to non-judicial members of
consumer fora varies from state to state and is too meager to attract
qualified talent. Most of the non-judicial members are not even capable
of writing or dictating small orders. At certain places non-judicial members
act in unison against the presiding officer, while passing orders contrary
H to law, damaging the reputation of the adjudicating body. Presidents, as
STATE OF U.P. v. ALL U P CONSUMER PROTECTION BAR
859
ASSOCIATION [DR. D. Y. CHANDRACHUD, J.]
a result, prefer a situation where such non-judicial members absent
A
themselves from work if only so that judicial work can be carried out by
the presidingjudge impartially and objectively. Many non-judicial members
do not maintain punctuality and others attend to work sporadically once
or twice a week. The Committee has observed that that the problem
lies in -(i) absence of proper remuneration; (ii) appointment of former
8
judicial officers who lack motivation and zeal; (iii) appointment of
practicing lawyers as presiding officers of district fora; and (iv) political
and bureaucratic interference in appointments. Many of the non-judicial
members attend to the place of work only to sign orders which have
been drafted by the presiding officer.
4. The Committee has furnished concrete examples of how
C
bureaucratic and political influence has marred the selection process as
a result of which the functioning of consumer fora is detrimentally
affected. Three instances furnished in the Report of the Committee
provided a telling example of the state of affairs:
"15). The Committee could make out that there has been
D
considerable bureaucratic and political influence/interference in the
'selection process' and functioning of the Consumer Fora. Just to cite a
few instances, the Committee found that relatives of politicians,
bureaucrats and judicial fraternity have been selected. A non-Judicial
Member Mr. Jamal Akhtar posted at District Forum Meerut has been
absenting without permission since 11.05.2015. The State Government
E
has failed to take any action against him. Even the plea of President,
State Commission has gone unheeded. The result is that his post has not
been declared vacant and another non-Judicial Member posted elsewhere
has been attached in his place.
16). One non-Judicial Member who had her first term at Lucknow
and has now been enjoying her Second Term, having been appointed for
District Forum Barabanki but has been attached to Greater Noida and
F
as per the reports, comes to Forum once or twice a week. Another
woman non-Judicial Member who happens to be wife of a bureaucrat
was appointed for District Forum Baghpat but was attached/posted at
G
Greater Noida. These few instances make it crystal clear that there is
definite political influence and interference and in such a scenario, the
work of District Consumer Fora is affected as it results in lowering the
morale of the President.
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860
A
B
c
SUPREME COURT REPORTS
[2016) 8 S.C.R.
17). In Haryana, a non-Judicial Woman Member did/does not
attend the District Forum regularly, as she has to travel around 150/160.
KM everyday. The President of one District Forum who happens to be
former President of Bar Association has been serving the second term
as President. Such non-Judicial Members manage to get selected and
then misuse their position as Members, as they call themselves 'Judges'."
The selection of persons as presiding officers and as members of
the fora lacks transparency without a fixed criteria for selection. The
Committee has, in our view with justification, proposed that a written
test should be conducted to assess the knowledge of persons who apply
for posts in the district fora. Issues of conflict of interest also arise
when persons appointed from a local area are appointed to a district
forum in the same area.
5. The position of the National Consumer Disputes Redressal
Commission has emerged from the interactions of the Committee with
the President and members of the Commission. The serious deficiencies
D
of infrastructure are summarized below :
(i)Sanctioned strength of personnel is far lower than the actual
requirement and is not based on the pendency of cases or on objective
norms adopted by statutory organizations;
E
(ii)There are 118 sanctioned posts as against a requirement of
322 while pendency of cases as on 30 September 2016 is 11,379;
(iii)Few personnel work on a regular basis while others who are
inducted on contract cannot be entrusted with work of a regular nature;
(iv)The sanctioned strength ofsixAssistants, ten UDCs and eight
F
LDCs to attend on the administrative side to judicial filing, establishment
work and to the general administration is totally inadequate;
(v)The strength of members has increased from five in 2003 to
t~ve at present without a corresponding increase in supporting staff
though the average monthly institution of original complaints has increased
G
by 300 per cent; and
H
(vi)Though the proposal for the creation of posts was sent to the
Government of India in 2010, only a few posts for catering to the
requirement of a sixth Bench (presently there are five) have been
sanctioned. The Committee has recommended that at least 51 posts be
STATE OF U.P. v. ALL UP CONSUMER PROTECTION BAR
861
ASSOCIATION [DR. D. Y. CHANDRACHUD, J.]
created immediately as an interim measure.
A
The Committee has noted that while the salary and allowances of
the President of the National Commission are equivalent to those of a
Judge of the Supreme Court, the conditions of service of members of
the National Commission are not at par with those of the sitting judges
of the High Court. The National Commission hears appeals and revisions
B
against orders of the State Commissions, whose Presidents are treated
at par with judges of the High Court. An anomalous situation prevails
where members of a higher forum (the National Commission) have
conditions of service inferior to those applicable to members of a forum
lower in hierarchy. The Committee has proposed that the members of
the National Commission should get the same salaries, allowances and
C
conditions of services as are available to sittingjudges of the High Court.
6. The Committee has opined that it is necessary to confer upon
the President of the National Commission the power to recruit and transfer
staff, to obviate delay in appointments. Exemption from consultation
with the UPSC should, it is proposed, be granted as in the case of several
D
other statutory tribunals, such as CAT, AFT and NGT.
7. The posts of President and members of the State Commission
in Tamil Nadu and Jammu & Kashmir are lying vacant for more than
one year. The Committee was assured by the Principal Secretary,
Consumer Affairs, Tamil Nadu on 31 May 2016 that these appointments
would be cleared within a short period. However, until the date of the
report, no steps have been taken. The Government of Jammu & Kashmir
has failed to appoint the President of the State Commission.
8. The Committee has formulated its suggestions to the Central
Government in Annexure A and the directions which it has issued to the
state governments in Annexures B to M to the report.
9. The interim report of the Committee provides an unfortunate
reflection of the state ofaffairs in the consumer fora at the district, state
E
F
and national level. That these bodies which are vested with important
functions ofajudicial nature continue to work despite the prevalence of G
such adverse conditions and in the face of the apathy of the governments
both at the national and state level ls a matter which requires immediate
intervention by this Court. A systemic overhaul of the entire infrastructure
is necessary if the Consumer Protection Act, 1986 is not to beCOJllC<,.ii
dead letter. With the proliferation of goods and services in a rapidly H
862
A
8
SUPREME COURT REPORTS
(2016) 8 S.C.R.
growing economy, Parliament envisaged the enactment to be the cornerstone of a vibrant consumer movement. Reality has been distant from
the aspirations of the law. Since the state of affairs which has been
revealed before the Court warrants systemic changes, we propose to
initially issue directions on certain specific issues in the present order
within a judicially manageable framework. We will now take up each of
the issues seriatim so as to enable the court to focus on each problem
and on the nature of the malady before proceeding to formulate the
directions :
(I) Administrative control :
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One of the principal problems governing the functioning of the
district fora on the one hand and the State Commissions on the other
hand is the absence of clarity in regard to the exercise of administrative
and disciplinary control. Section 248 provides for administrative control,
in the following terms :
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"24B. Administrative control. - (I) The National Commission
shall have administrative control over all the State Commissions in the
following m11tters, namely:-
(i) calling for periodical return regarding the institution, disposal,
pendency of cases;
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(ii) issuance ofinstructions regarding adoption ofuniform procedure
in the hearing of matters, prior service of copies of documents produced
by one party to the opposite parties, furnishing of English translation of
judgments written in any language, speedy grant of copies of documents;
(iii) generally overseeing the functioning of the State
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Commissions or the District Fora to ensure that the objects and
purposes of the Act are best served without in any way interfering
with their quasi-.iudicial freedom.
(2) The State Commission shall have administrative
control over all the District Fora within its jurisdiction
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in all matters referred to in sub-section (l)".
(emphasis supplied)
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Clause (iii) of sub-section (I) of Section 248 confers upon the
National Commission the power of administrative control over all the
State Commissions to generally oversee the functioning of the State
STATE OF U.P. v. ALL UP CONSUMER PROTECTION BAR
863
ASSOCIATION [DR. D. Y. CHANDRACHUD, J.]
Commissions or the district fora to ensure that the objects and purposes
of the Act are best served. However, this is to be achieved without
interfering with the quasi-judicial freedom of the State Commissions and
the district fora. Under sub-section (2) the State Commission is conferred
with administrative control over all the district fora within its jurisdiction
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in all matters referred to in sub-section (1 ), which will necessarily cover
clause (iii). The power of administrative control which has been conferred
upon the National Commission in relation to the State Commissions and
upon the Sta:te Commissions in relation to the district fora is an entrustrnent
with a purpose; the object being to oversee the functioning of the forum,
which is subject to its administrative control so as to ensure that it is an
effective instrument of rendering justice to consumers. The power of C
administrative control is couched in wide terms. The power would include
overseeing the functioning of the State Commissions and the district
fora in all administrative matters. This would include the posting of and
control over members, appointment of and control over manpower,
provision of adequate infrastructure and the streamlining of all
administrative matters (except the exercise of the judicial power in
deciding complaints, appeals and revisions). The difficulties which have
been encountered in the proper functioning of the district fora and the
State Commissions can be obviated in a large measure once the true
ambit of Section 248 is construed, by vesting full powers of an
administrative nature in the National Commission (in relation to the State
Commissions) and in the State Commissions (in relation to district fora).
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In the National Commission, the exercise ofadministrative authority over
the State Commissions shall be vested in the President. Similarly, in the
State Commissions the exercise ofadministrative control over the district
fora shall be vested in the President.
(2) Rule making powers:
Rule making powers under the Consumer Protection Act, I 986
are embodied in Section 30 which provides as follows:
"30. Power to make rules.-
(1) The Central
Government may, by notification, make rules for
carrying out the provisions contained in clause (a) of
sub-section (1) of section 2, clause (b) of sub-section
(2) of section 4, sub-section (2) of section 5, subF
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SUPREME COURT REPORTS
[2016] 8 S.C.R.
section (2) of section 12, clause (vi) of sub-section
(4) of section 13, clause (hb) of sub-section (1) of
section 14, section 19, clause (b) of sub-section (1)
and sub-section (2) of section 20, section 22 and
section 23 of this Act.
(2) The State Government may, by notification, make
rules for carrying out the provisions contained in
clause (b) of sub-section (2) and sub-section (4) of
section 7, clause (b) of sub-section (2) and sub-section
(4) of Section SA, clause (b) of sub-section (1) and
sub-section(3) of section 10, clause (c) of sub-section
(1) of section 13, clause (hb) of sub-section (1) and
sub-section (3) of section 14, section 15 and clause
(b) of sub-section (1) and sub-section (2) of section
16 of this Act."
The composition of the district fora is provided in Section I 0 while
D the composition of the State Commissions is provided in Section 16.
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Section 10(3) provides as follows:
"IO.
(3) The salary or honorarium and other allowances payable
to, and the other terms and conditions of service of the
members of the District Forum shall be such as may be
prescribed by the State Government:
[Provided tha.t the appointment of a member on whole-time
basis shall be made by the State Government on the
recommendation of the President of the State Commission
taking into consideration such factors as may be prescribed
including the work load of the District Forum.]
The pension received by the presidents of the District
Consumer Forum in respect of their previous services as
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District Judges is subject to deduction from their salary as
president of the Forum fixed under provisions of the Act."
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In relation to the State Commissions sub-section (2) of Section 16
provides as follows:
STATE OF U.P. v. ALL UP CONSUMER PROTECTION BAR
865
ASSOCIATION [DR. D. Y. CHANDRACHUD, J.]
"16.
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(2) The salary or honorarium and other allowances payable
to, and the other terms and
conditions of service of, the members of the State
Commission shall be such as may be prescribed by the State
Government.
[Provided that the appointment of a member on whole-time
basis shall be made by the State Government on the
recommendation of the President of the State Commission
taking into consideration such factors as may be prescribed
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including the work load of the State Commission.]"
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Hence, the state governments are required under sub-section (3) of
Section 10 and under sub-section (2) of Section 16 to prescribe the salary
or, honorarium, allowances and the other terms and conditions of service
of the members of the district fora and of the State Commission.
10. Section 10 provides for composition of the district forum. Clause
(b) of sub-section ( 1) of Section I 0 stipulates the appointment of two
D
members (apart from the President, who is to be or should have been or
must be qualified to be a district judge). Section 10( I )(b) is as follows:
"Composition of the District Forum :
( 1) Each District Forum shall consist of •.•
(b). two other members, one of whom shall be a woman,
who shall have the following qualifications, namely:-
(i) be not less than thirty-five years of age,
(ii) possess a bachelor's degree from a recognized university,
(iii) be persons of ability, integrity and standing, and have
adequate knowledge and experience of at least ten years in
dealing with problems relating to economics, law, commerce,
accountancy, industry, public affairs or administration."
Section 16( 1 )(b) provides for appointment of the members of the
State Commission (apart from the president who is to be or should have
been a judge of the High Court). Section 16(l)(b) in so far as is material
provides as follows:
"16. Composition of the State Commission:
( 1) Each State Commission shall consist of -
16(1 )(b) Each State Commission shall consist of not less
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SUPREME COURT REPORTS
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A
than two, and not more than such number of members, as
may be prescribed, and one of whom shall be a woman,
who shall have the following qualifications, namely:-
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(i) be not less than thirty-five years of age;
(ii) possess a bachelor's degree from a recognised
university; and
(iii) be persons of ability, integrity and standing, and have
adequate knowledge and experience of at least ten years
in dealing with problems relating to economics, law,
commerce, accountancy, industry, public affairs or
administration."
11. The Central government is vested with rule making power in
relation to Section 20( I )(b) - relating to appointments of members of
the National Commission under Section 30. The rule making power with
reference to the provisions of Section IO(l)(b) and Section 16(1)(b) is
vested in the State government under Section 30. The difficulty arises
because the vesting of the rule making power in the state governments
in this manner may result in a lack of uniformity of rules across the
country, both in regard to the terms and conditions of service as well as
in regard to the modalities to be followed in ensuring that persons
appointed as members fulfill the qualifications which are prescribed.
Both in relation to the State Commissions and the district fora, a member
must be a person of ability and standing with adequate knowledge and
experience of at least ten years in dealing with problems relating to
economics, law, commerce, accountancy, industry, public affairs or
administration. These are broad general categories. There can be no
gainsaying the impo11ance of adopting unified standards and objective
processes of selection from a national perspective. This would ensure
an objective fonnulation of nonns and their uniform application in different
states in the country. In the absence of a uniform pattern, the resu It is a
wide variation in standards and a great deal of subjectivity, and
bureaucratic and political interference, which has been noticed in the
reports submitted by the Committee to this Court. The Committee which
has looked at the entire matter in perspective consists of a former judge
of this Court, a former judge of the Delhi High Court, and the Secretary
to the Union Government in the Ministry of Consumer Affairs, Food and
Public Distribution. The findings of the Committee in the interim report
are entitled to deference.
STATE OF U.P. v. ALL UP CONSUMER PROTECTION BAR
867
ASSOCIATION [DR. D. Y. CHANDRACHUD, J.]
12. In these circumstances, we hold that Section 24B vests
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administrative control over the State Commissions in the President of
the National Commission and over the district fora in the Presidents of
the State Commissions. The extent of the administrative control shall be
in all matters relating to the administrative functioning of the forum
concerned including but not limited to assignment of judicial and
B
administrative work; posting, transfer and control over members;
selection, appointment and disciplinary matters relating to the staff of
the district fora and State Commissions and in relation provisioning and
meeting the infrastructural requirements of those bodies. The
requirements of infrastructure shall be met in coordination with the
Departments of Consumer Affairs of the states concerned and, in relation
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to the National Commission in coordination with the Union Ministry of
Consumer Affairs, Food and Public Distribution.
·
13. We also direct the Union Government to frame model rules
with reference to the provisions of Section 10( 1 )(b) and Section 10(2)
and Section 16(l)(b) and Section 16(2), within four months from today.
D
The model rules so framed shall be placed before this Court for its
approval. After the model rules are approved by this Court, the state
governments shall while exercising their rule making authority with
reference to the provisions of Section I 0(1 )(b) and Section 16(1 )(b) and
with reference to the provisions of Sections 10(3) and 16(2) frame rules
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in conformity with the model rules. Existing rules, if any, shall have to be
brought in conformity with the model rules.
14. Under Section 30(A)(l) the National Commission is
empowered, with the previous approval of the Central Government, to
frame regulations not inconsistent with the Act to provide for all matters
for which provision is necessary or expedient for the purpose of giving
effect to the provisions of the Act. It is necessary for the National
Commission to frame regulations expeditiously to give effect to its
administrative control under Section 24B. The Regulations shall inter
alia extend to ensuring the effective exercise of administrative control
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by the National Commission over the State Commissions and by the
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latter over the district fora.
15. Under Section 24B the adjudicatory fora under the Consumer
Protection Act, 1986 have been constituted to resolve complaints of
consumers about: (i) unfair or restrictive trade practices by traders and
service providers; (ii) defects in goods purchased or agreed to be
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purchased; and (iii) deficiencies in the provision of services availed ofor
hired.
Against the decision of the district forum upon an origiml complaint
a remedy of an appeal is provided to the State Commission. The State ·
Commission also has jurisdiction where the amount claimed is in excess
of Rupee~ twenty lakhs (complaints below that amount lie before the
district fora) and upto Rupees one crore.